Thinking about adding a new home to your portfolio? Before you buy, make sure you consider every factor that could affect your ability to sell or rent out the property. While some features are obvious disadvantages, others are more hidden. We take a look at three that could surprise you.
Low performing school districts, a damaged roof and small bedrooms – these are all well known factors that can tank a home’s resale value.
Other more hidden features, however, can also have a significant impact on a property’s value and some of them might surprise you.
What are they? Here are three every investor should steer clear of when adding a new property to their portfolio.
1. A lack of privacy
Renters and prospective buyers are going to want privacy. Most investors realise this and are careful to select homes with green space around them or at least certain features that keep the neighbours’ eyes out.
Few investors will consider every factor, however. If you really want a home that will offer an ideal level of privacy, be sure to examine:
Distance to neighbours around every side,
Neighbourhood home density,
Distance to street,
View into and out of all windows and doors.
2. A high-maintenance yard
Expert investors know the importance of curb appeal. Well maintained lawns and lush gardens will make a home stand out immediately to tenants and buyers, but did you know that buyers are also thinking “Okay, great lawn – but can I manage it?”
To this end, make sure you think about the level of yard work and maintenance that will be required at a given property. After all, an elaborate garden can only add value to a home if it’s cared for properly. If you or your tenants let the flowers die and the shrubs grow out of control, your property value will suffer in the end.
3. Over-the-top renovations
Similarly, extreme renovations intended to add value to a property can also have the opposite effect if they’re too extravagant.
We’re talking about ultra-modern kitchen designs, super-vibrant painted walls and other renovations that might be too much for the average buyer or tenant. While you want a unique, interesting property, you don’t want something in your portfolio that is so over-built or designed its appeal is limited.